UNITED STATES BANKRUPTCY COURT
|DO NOT PUBLISH
This case disposition has no value as precedent and is not intended for publication. Any publication, either in print or electronically, is contrary to the intent and wishes of the court.
NORTHERN DISTRICT OF CALIFORNIA
JOANN JONES, No. 98-12252
v. A.P. No. 99-1015
UNITED STATES OF AMERICA,
Memorandum of Decision
Debtor Joann Jones is a single mother of two minor children, one of which has a learning
disability and has suffered from leukemia. She receives no child support payments. She has recently
returned to the work force after almost 10 years on welfare and drug abuse. She earns about $1,000
per month at a local hospital doing housecleaning and dish washing. In this adversary proceeding, she
seeks a hardship discharge of her student loan obligations.
To obtain discharge of student loan as undue hardship, bankruptcy debtor must establish that she
cannot maintain, based on current income and expenses, a minimal standard of living for herself and her
dependents if forced to repay the loan, that additional circumstances exist indicating that this state of
affairs is likely to persist for a significant portion of the repayment period, and that the debtor has made
good faith efforts to repay the loan. In re Pena
, 155 F.3d 1108 (9th
Cir. 1998). The United States
concedes that the first and third conditions are present, in that Jones' current income is not sufficient to
both maintain her family and pay the loans and that Jones has made a good faith effort to repay the
loans. However, it argues that the current state of affairs is not likely to persist. All of the evidence
supports the debtor's position.
Jones' current situation represents a major improvement of her life to regular employment and
income from welfare and drug abuse. While Jones enjoys her work and intends to keep her job, she will
not be eligible for advancement for many years, if at all. In addition, she will lose $570 per month in
income Social Security income when her son reaches the age of 18 in three years. Her present situation
is the best that can reasonably be expected for the foreseeable future. Accordingly, the court finds that
all three of the Pena
conditions have been demonstrated and Jones is entitled to a hardship discharge of
her student loans.
This memorandum constitutes the court's findings and conclusions pursuant to FRCP 52(a) and
FRBP 7052. Counsel for Jones shall submit an appropriate form of judgment forthwith.
Dated: December 13, 1999 ________________________________